Mutual Fund Investment is a collective investment fund type which seeks on deploying the investor’s money according to mandate and then generating returns through balancing the involved risks and opportunities.
The whole base that the mutual fund investment is formed on has a hierarchical structure having multiple balances and checks ensuring the investor’s protection. While AMCs are involved in hands-on investment, trustees hold a watch on AMC’s functioning and agencies such as registrar, custodian, etc.
The Mutual Funds market is regulated through SEBI with extremely strict reporting and investment norms. Overall, the disclosure level that India’s Mutual Fund ecosystem maintains is unparalleled.
The reason we are telling you all this is because in this article we are going to tell you the ways you can track your mutual fund investments. But the fact that mutual funds market is one of the most protected ones, gives the investors an excuse to not track their fund’s performance. A move that is not acceptable or appreciated in the mutual fund investment market.
Let us look into the reasons why investors should, in the first place, keep a track on their mutual fund investment irrespective of the fact that it’s a highly regulated and secure industry.
While it is true that the control and systems in place handle your hard earned money prudently and the investor’s best interests are always at the forefront,, you should keep a tab on whether you should keep the investment intact in order to meet your financial goals.
It is ultimately the investor’s responsibility to make sure that they are getting the benefits of their investment.
Now that we have established that it is of utmost importance that the investors keep track of their mutual funds, it is time to look at the “how” part of it all.
How To Keep Track of Your Mutual fund Investments?
1. Performance Tracking
While the mutual fund scheme has a benchmark against which the performance gets compared, you need to compare them with similar schemes which operate within the market. So it is very important to evaluate fund performance against its own benchmark index and comparable funds.
2. Investment Style Monitoring
The fund might have claimed an investment with a value-approach of stock picking, but there are chances that it veers off to a growth-approach. Any change in the investment style might change the fund’s risk profile in a way that the overall portfolio risk increases. So, keep a close watch on the change in investment style so that you don’t face any such risk.
3. Change of Fund Manager
While a lot of fun houses evolve their business process in a way that they would function smoothly minus any human dependencies, fund managers do tend to impart their touch in the fund performance. So, if the fund manager changes, you will have to ensure that the intention of the new fund manager meets your criteria.
4. Holdings of Portfolio
You need to keep a close eye on the holdings by tracking the mutual fund’s top holdings. If you find the proportion to be too high, it might indicate greater risk on portfolio and when it is too low, it might mean that there are many holdings in the portfolio that might not be very optimal. You should also assess the portfolio quality through monitoring the parameters such as duration, credit quality, yield to maturity, etc.
So here were the four ways you can measure and keep a close look on your mutual fund investments. Now that you know what they are, it is time to open your Mutual Fund investment sheet and check its performance so far. Find out if the movement is happening as per your expectation or if it needs any changes as a part of your future course of action.
Meanwhile, if you wish to know which mutual fund would get you high return on your investment, get in touch with our fund experts, today!